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/Evening Wrap: ASX 200 closes out solid recovery week with another gain as energy, uranium, and gold stocks star
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Market Wraps
/Evening Wrap: ASX 200 closes out solid recovery week with another gain as energy, uranium, and gold stocks star
Market Wraps
Evening Wrap: ASX 200 closes out solid recovery week with another gain as energy, uranium, and gold stocks star
Fri 10 May 24, 5:43pm (AEST)
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Commodities in article
The S&P/ASX 200 closed 27.4 points higher, up 0.36%.
It was a relatively quiet end to what will go down as a very good week for Aussie investors. Look at a chart of the S&P/ASX 200 and you'll see this week's gain couldn't have come at a better time, as the price of the benchmark was teetering in the wake of April's sharp correction.
Resources stocks were again in focus today, as increases in the prices of crude oil, natural gas, gold, and silver stoked big gains in each of those areas of the market. Uranium stocks bounced back nicely after their pullback yesterday.
For all of the key moves, news, and analysis...
Let's dive in!
Today in Review
Fri 10 May 24, 4:56pm (AEST)
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Markets
ASX 200 Session Chart
The S&P/ASX 200 (XJO) finished 27.4 points higher at 7,749.0, 0.35% from its session low and 0.25% from its high. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 174 to 100.
For the week, the XJO finished up 120 points or 1.6% higher. It closed 1.6% above the week's low and 0.84% below the week's high.
The Energy (XEJ) (+1.9%) sector was the best performing sector today, likely in response to a modest bounce in crude oil and natural gas prices. Uranium stocks bounced back from yesterday's pullback, and so it was perhaps the coordinated efforts of both carbon-based and nuclear-based energy sources that gave the sector its extra zip!
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
Beach Energy (BPT) | $1.690 | +$0.065 | +4.0% | +7.0% | +17.4% |
Karoon Energy (KAR) | $1.970 | +$0.075 | +4.0% | -13.2% | -7.5% |
Boss Energy (BOE) | $5.78 | +$0.22 | +4.0% | +19.4% | +114.9% |
Deep Yellow (DYL) | $1.675 | +$0.06 | +3.7% | +19.6% | +204.5% |
Nexgen Energy (NXG) | $12.34 | +$0.44 | +3.7% | +2.0% | +117.6% |
Coronado Global Resources (CRN) | $1.125 | +$0.025 | +2.3% | -5.1% | -27.2% |
Strike Energy (STX) | $0.240 | +$0.005 | +2.1% | +2.1% | -48.4% |
Santos (STO) | $7.86 | +$0.16 | +2.1% | +1.6% | +8.1% |
Woodside Energy Group (WDS) | $28.63 | +$0.53 | +1.9% | -4.5% | -15.7% |
Viva Energy Group (VEA) | $3.48 | +$0.06 | +1.8% | -3.9% | +14.1% |
Ampol (ALD) | $36.15 | +$0.54 | +1.5% | -9.2% | +23.9% |
Yancoal Australia (YAL) | $5.95 | +$0.08 | +1.4% | +5.7% | +10.6% |
Bannerman Energy (BMN) | $4.54 | +$0.06 | +1.3% | +17.9% | +236.3% |
New Hope Corporation (NHC) | $4.68 | +$0.05 | +1.1% | -2.9% | -8.2% |
Paladin Energy (PDN) | $16.54 | +$0.16 | +1.0% | +8.1% | +152.5% |
Both carbon-based and nuclear-based energy stocks rallied today
Also doing well today was the Gold (XGD) (+1.7%) sub-index. I've written plenty about the technicals on gold and silver today, and I will refer you to these items and others which are discussed in ChartWatch below.
Company | Last Price | Change $ | Change % | 1mo % | 1yr % |
|---|---|---|---|---|---|
St Barbara (SBM) | $0.275 | +$0.035 | +14.6% | 0% | -7.8% |
Kingsgate Consolidated (KCN) | $1.785 | +$0.205 | +13.0% | +21.4% | +29.3% |
Resolute Mining (RSG) | $0.460 | +$0.035 | +8.2% | -4.2% | -6.1% |
Silver Mines (SVL) | $0.195 | +$0.01 | +5.4% | +2.6% | -20.4% |
Gold Road Resources (GOR) | $1.610 | +$0.06 | +3.9% | -5.8% | -16.8% |
Emerald Resources (EMR) | $3.50 | +$0.12 | +3.6% | +1.2% | +82.3% |
Red 5 (RED) | $0.460 | +$0.015 | +3.4% | +12.2% | +155.6% |
Bellevue Gold (BGL) | $1.760 | +$0.055 | +3.2% | -10.0% | +34.4% |
Silver Lake Resources (SLR) | $1.510 | +$0.04 | +2.7% | +15.3% | +36.0% |
Genesis Minerals (GMD) | $1.815 | +$0.045 | +2.5% | -6.7% | +40.7% |
West African Resources (WAF) | $1.435 | +$0.035 | +2.5% | +6.7% | +47.9% |
Westgold Resources (WGX) | $2.22 | +$0.05 | +2.3% | +5.7% | +30.2% |
Newmont Corporation (NEM) | $64.37 | +$1.19 | +1.9% | +7.3% | 0% |
Evolution Mining (EVN) | $3.84 | +$0.05 | +1.3% | -2.0% | -2.0% |
Northern Star Resources (NST) | $14.67 | +$0.17 | +1.2% | -2.2% | +4.9% |
Perseus Mining (PRU) | $2.32 | +$0.02 | +0.9% | +2.2% | +8.4% |
Aussie gold stocks are shining again
ChartWatch
Earlier today, I published a dedicated ChartWatch on Gold and Silver futures.
In it I noted that if you think gold and silver are going up, it's seldom best to connect this to buying ASX gold stocks. I thought I'd better do the research to back up this bold statement!
The results surprised me a little. I assumed gold would beat out most ASX stocks, especially given our gold stocks have had a tough time on costs recently, the weather in some cases, and the usual plethora of production challenges that go with digging stuff out of the ground (for example, see SSR Mining's (ASX: SSR) calamitous incident at its Çöpler gold mine in Turkey).
If we take the beginning of the current phase of the gold bull market as the major low of 6 October 2023, and compare the performance of gold to the 17 biggest ASX gold stocks by market capitalisation, we can see that 10 stocks delivered returns in excess of gold's 28.1%.
Spot Gold (XAUUSD) vs Various ASX Gold Stocks since Spot Gold major low on 6 October 2023
Only Capricorn Metals (ASX: CMM), Evolution Mining (ASX: EVN), and Gold Road Resources (ASX: GOR) and are substantially worse, with SSR the only of the 17 to deliver a negative return.
Contrasting this, West African Resources (ASX: WAF) with a 110% return delivered the best bang for your gold buck over the period, with Silver Lake Resources (ASX: SLR) in second place with a 69% gain. It should be noted, however, that each of these two stocks rallied off a very low base compared to the others.
So, looking at the above chart, one could argue there is value in picking the right gold stock versus simply investing in gold via physical, futures, CFDs, or ETFs (again see the article for full details on each of these options). The question of course, is how do you pick the right ASX gold stock? And regardless, you'll never be able to predict an SSR type of event.
Let's look at how the gold versus ASX gold stocks comparison has played out during a period where the gold price has been falling. We've all had that feeling as ASX gold stock investors – the gold price has sneezed and yet my gold stock is in a coma – forget catching a cold!
In the chart below, see the returns of spot gold versus the same 17 ASX gold majors since gold's all time high on 12 April.
Spot Gold (XAUUSD) vs Various ASX Gold Stocks since Spot Gold major high on 12 April 2024
Gold's flat return since 12 April is looking pretty good now, with only SLR, Newmont Mining (ASX: NEM), Red 5 (ASX: RED), and Westgold Resources (ASX: WGX) doing better.
A little more disturbing here, is the fact that there's a bunch of stocks (EVN, RRL, SSR, NST, and EMR) that have underperformed by around 5%, and another bunch (GMD, CMM, RSG, GOR, and BGL) that have substantially underperformed by around 10%-15%.
I'll let you draw your own conclusions from the data, but having done the research, I'm sticking with my view that trading the commodity directly where possible is a more reliable bet than trying to pick the best ASX stock that is producing that commodity.
Economy
Today
There weren't any major economic data releases in our time zone today.
Later this week
Saturday
USA Preliminary University of Michigan Consumer Sentiment
Expected -0.9% to 76.3% vs -0.9% to 77.2% in April
Latest News
Interesting Movers
Trading higher
+14.6% St Barbara (SBM) - 10 Year Plus Outlook for Simberi $ bounced off short term uptrend ribbon, long term trend is transitioning from down to up 🔎📈
+13.0% Kingsgate Consolidated (KCN) - Green Light for Plant 1 at the Chatree Gold Mine, rise is consistent with prevailing short and long term uptrends 🔎📈
+11.9% Jupiter Mines (JMS) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈
+10.0% Sayona Mining (SYA) - No news, lithium prices down for second day, yet mystery SYA rally continues!
+8.7% Appen (APX) - No news 🤔
+8.2% Resolute Mining (RSG) - No news, generally stronger ASX gold sector today on rebound in the gold price, rise is consistent with prevailing short and long term uptrends 🔎📈
+8.1% 4DMEDICAL (4DX) - Market update on recent developments
+7.5% Calix (CXL) - No news, a bit like APX, and some of those beaten down lithium stocks, perhaps some short covering is afoot!? 🤔
+7.3% Nuix (NXL) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈
+6.9% Spartan Resources (SPR) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈
+6.1% Droneshield (DRO) - No news, rise is consistent with prevailing short and long term uptrends 🔎📈
+5.4% Syrah Resources (SYR) - No news, a bit like APX, and some of those beaten down lithium stocks, perhaps some short covering is afoot!? 🤔
+5.4% Silver Mines (SVL) - No news, big rally in silver price Thursday
+4.8% Lake Resources (LKE) - LKE is rallying also? 🤔
Trading lower
-8.7% Galan Lithium (GLN) - No news, fall in lithium prices hurting several ASX lithium stocks today, fall is consistent with prevailing short and long term downtrends 🔎📉
-6.0% Light & Wonder (LNW) - Quarterly Report
-4.8% Credit Corp Group (CCP) - Continued negative response to yesterday's news, fall is consistent with prevailing short and long term downtrends 🔎📉
-3.4% Cettire (CTT) - No news, fall is consistent with prevailing short term downtrend, long term trend is transitioning from up to down 🔎📉
-2.9% Judo Capital Holdings (JDO) - Continued negative response to yesterday's news
-2.8% GWA Group (GWA) - Change in substantial holding from PPT
Broker Notes
Aussie Broadband (ABB)
Downgraded to accumulate from buy at Ord Minnett; Price Target: $4.19 from $4.16
Ainsworth Game Technology (AGI)
Downgraded to neutral from outperform at Macquarie; Price Target: $1.10 from $1.45
ARB Corporation (ARB)
Upgraded to buy from accumulate at Ord Minnett; Price Target: $44.00 from $42.50
Baby Bunting Group (BBN)
Retained at neutral at Citi; Price Target: $1.59 from $1.70
Brambles (BXB)
Retained at sell at Citi; Price Target: $14.25
Commonwealth Bank of Australia (CBA)
Retained at sell at Goldman Sachs; Price Target: $82.61 from $81.98
Retained at underweight at Jarden; Price Target: $102.00
Retained at underperform at Jefferies; Price Target: $80.00
Retained at underweight at JP Morgan; Price Target: $91.00 from $89.00
Retained at underperform at Macquarie; Price Target: $95.00
Curvebeam AI (CVB)
Retained at buy at Bell Potter; Price Target: $0.33 from $0.55
IPH (IPH)
Retained at buy at Goldman Sachs; Price Target: $8.70
JB HI-FI (JBH)
Retained at neutral at E&P; Price Target: $57.43 from $58.00
Retained at underweight at Jarden; Price Target: $50.50 from $50.80
Upgraded to overweight from neutral at JP Morgan; Price Target: $63.00 from $60.00
Retained at neutral at UBS; Price Target: $59.00 from $60.00
Judo Capital Holdings (JDO)
Retained at sell at Citi; Price Target: $1.04
Retained at buy at Goldman Sachs; Price Target: $1.72 from $1.66
Leo Lithium (LLL)
Downgraded to sell from neutral at Jarden; Price Target: $0.43 from $0.60
Lotus Resources (LOT)
Retained at buy at Bell Potter; Price Target: $0.60 from $0.50
Arcadium Lithium (LTM)
Retained at buy at Bell Potter; Price Target: $9.50 from $10.40
Neuren Pharmaceuticals (NEU)
Retained at buy at Bell Potter; Price Target: $26.50 from $27.00
News Corporation (NWS)
Retained at buy at Goldman Sachs; Price Target: $44.70 from $45.30
Orica (ORI)
Retained at neutral at Citi; Price Target: $19.50 from $19.00
Retained at buy at Jefferies; Price Target: $20.80 from $18.80
Retained at overweight at JP Morgan; Price Target: $20.70 from $19.00
Retained at outperform at Macquarie; Price Target: $20.05 from $19.05
Retained at outperform at RBC Capital Markets; Price Target: $22.00 from $21.50
Retained at buy at UBS; Price Target: $21.30
Pro Medicus (PME)
Upgraded to outperform from underperform at CLSA; Price Target: $125.00 from $100.00
Perpetual (PPT)
Retained at buy at Bell Potter; Price Target: $27.60
REA Group (REA)
Retained at neutral at Citi; Price Target: $187.00
Retained at buy at Goldman Sachs; Price Target: $202.00
Retained at hold at Jefferies; Price Target: $200.45 from $171.51
Retained at neutral at Macquarie; Price Target: $196.00 from $179.00
Retained at hold at Morgans; Price Target: $178.00 from $174.00
Upgraded to buy from neutral at UBS; Price Target: $214.00 from $184.00
Rural Funds Group (RFF)
Retained at buy at Bell Potter; Price Target: $2.40
Scentre Group (SCG)
Retained at neutral at Citi; Price Target: $3.10
Santos (STO)
Retained at hold at Citi; Price Target: $8.00
Super Retail Group (SUL)
Retained at buy at Goldman Sachs; Price Target: $17.80
Upgraded to sell from neutral at UBS; Price Target: $13.00 from $13.75
Temple & Webster Group (TPW)
Retained at hold at Bell Potter; Price Target: $1.40 from $12.00
Retained at buy at Citi; Price Target: $12.00 from $13.00
Woodside Energy Group (WDS)
Retained at sell at Citi; Price Target: $24.00
Scans
Carl has over 30-years investing experience and has helped investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.
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